Northern Beat: Op-ed – Northwest edges closer to revenue-sharing agreement

Business is booming in B.C.’s northwest, but you wouldn’t know it by looking at the crumbling streets and leaking pipes of the region’s towns and cities.

That disconnect between the economic prosperity of the region’s natural resource projects, and its cash-starved municipalities, led a delegation of mayors to travel to Victoria this week to plead their case for financial help directly to Premier David Eby.

The Northwest BC Resource Benefits Alliance, as its called, wants a revenue sharing deal similar to that of the Peace Region in the northeast, where the province pays out $50 million annually shared between Chetwynd, Dawson Creek, Fort St. John, Hudson’s Hope, Pouce Coupe, Taylor, Tumbler Ridge and the Peace River Regional District.

“There’s so much revenue coming to the northwest and not enough of it is staying,” said Terrace mayor Sean Bujtas, a co-chair in the alliance.

“We’ve got many communities suffering that can’t afford to put infrastructure in. And we felt it was time, and fair, that we found a similar agreement to the Peace River Agreement, something similar for the northwest.”

Stronger together

The Resource Benefits Alliance is made up of 21 local governments from Masset to Vanderhoof, who’ve banded together to form a stronger lobbying arm in negotiations with the provincial government. It’s a varied list, including Houston, Burns Lake, Kitimat, Smithers, Prince Rupert, Queen Charlotte, and more, including regional districts.

Their argument is simple: The northwest has seen $13 billion in development of pipelines, energy transmission lines, mines, LNG terminals, port expansions and smelters in the last five years, generating $500 million in revenue to the provincial government, but comparatively little for their towns and cities because the projects lie largely outside of their municipal borders.

The alliance wants an annual grant from the province to help pave roads, upgrade municipal facilities, and improve basic services like sewers and drinking water, to help accommodate all the people who live and visit their municipalities as part of the projects, but whose companies contribute little to the tax base.

“What it means is our communities could become sustainable,” said Bujtas.

The tiny town budgets are already straining to handle demand. For Terrace, it meant only enough money to pave one road last year.

“Right now I’m paving 400 metres of road a year on average, and that’s not sustainable,” he said. “I’ve got 85 kilometres of road. That means if I pave a road this year, I can’t pave it again for 212 years from now.”

Push for northwest benefits agreement progressed under NDP

The previous BC Liberal government renewed the Peace River Agreement in 2015, pledging $1.1 billion over 20 years to the eight local governments in the northeast.

For a community like Fort St. John, that money makes up 85 per cent of its annual city capital budget for things like water, sewers and roads, as well as upgrades to the local arena, the downtown core and a new RCMP arena.

But the Liberals were less interested in signing a northwest deal at the time. The lobbying effort atrophied until recently under the BC NDP, when it was picked up and spearheaded by Stikine MLA and NDP cabinet minister Nathan Cullen.

As the current Minister of Water, Land and Resource Stewardship, and the ranking northern minister in the government, Cullen has helped push the project toward a deal with a memorandum of understanding last fall.

“Really good progress made,” Cullen said in an interview.

“The underlying issue and thing that we need to address, particularly in places like the northwest, is the rapid growth of development, particularly resource development, and the strain that that puts on a lot of local governments that don’t have a great deal of money at hand.

MOU a step toward ‘properly supporting’ communities

“So we have that MOU that’s been signed between us and the Resources Benefits Alliance, which is a large number of communities, to get to an eventual conclusion on how do we properly support the communities that are facing that kind of pressure.”

In the meantime, the NDP government provided Prince Rupert with $65 million to help fix its crumbling water infrastructure system, as well as $150 million in northern capital grant planning.

“We know that their services are strained and struggling with what is a good problem to have, which is a lot of economic activity,” said Cullen.

Meanwhile, the meeting with the northwest mayors and Eby went well.

“The premier has been very responsive to this particular issue,” said Bujtas. “We’ve had a good conversation. I think he gets it. And I take him on his word he wants to get a deal done by the next budget.”

But until the ink is dry on the budget, and the funding starts flowing, the mayors say they’ll keep pressing Victoria to follow through on the deal.